First Trust New Opportunities MLP & Energy Fund's Dividend Analysis
Assessing the Sustainability of First Trust New Opportunities MLP & Energy Fund's Dividend
First Trust New Opportunities MLP & Energy Fund (NYSE:FPL) recently announced a dividend of $0.04 per share, payable on 2024-01-16, with the ex-dividend date set for 2024-01-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into First Trust New Opportunities MLP & Energy Fund's dividend performance and assess its sustainability.
What Does First Trust New Opportunities MLP & Energy Fund Do?
-
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
-
How to calculate the intrinsic value of a stock?
First Trust New Opportunities MLP & Energy Fund is a non-diversified, closed-end management investment company. Its investment objective is to seek a high level of total return with an emphasis on current distributions paid to common shareholders. The fund invests in various industries, including pipelines, electric power, natural gas utility, coal, and others.
A Glimpse at First Trust New Opportunities MLP & Energy Fund's Dividend History
First Trust New Opportunities MLP & Energy Fund has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down First Trust New Opportunities MLP & Energy Fund's Dividend Yield and Growth
As of today, First Trust New Opportunities MLP & Energy Fund currently has a 12-month trailing dividend yield of 6.54% and a 12-month forward dividend yield of 6.54%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, First Trust New Opportunities MLP & Energy Fund's annual dividend growth rate was -20.60%. Extended to a five-year horizon, this rate decreased to -21.20% per year. Based on First Trust New Opportunities MLP & Energy Fund's dividend yield and five-year growth rate, the 5-year yield on cost of First Trust New Opportunities MLP & Energy Fund stock as of today is approximately 1.99%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-04-30, First Trust New Opportunities MLP & Energy Fund's dividend payout ratio is 0.92. And this may suggest that the company's dividend may not be sustainable.